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Things that make the practice go round

6th Feb 2006
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I can't recall the times I have been asked about staff problems as a practitioner. I wish I'd known how to solve them all. I sometimes wished I'd known how to keep my own staff happy all the time. But along the way I think I have learned quite a lot of tricks, and as a practitioner one of the most important things you can do is not just answer a client's question but reframe that question as well to make sure they are looking at things the right way. The reason's obvious. If they ask the wrong question then they'll get the wrong answer.

As a result I found a recent book by Prof Adrian Furnham interesting. He's professor of psychology at University College London and a Daily Telegraph columnist and he's written a book called 'Just for the Money' (ISBN 1904879500, Cyan Books, October 2005, about £9.99). In this he argues that cash, by itself neither really motivates us nor makes us happy. I think it's fair to say he's assuming that the cash we have is enough to live on ' and quite surprisingly many surveys show that this point is reached well before average national wage is reached.

His argument is that we should rank the following in order of priority:

1. Bonuses
2. Feedback
3. Holiday allowances
4. Interesting work
5. Other benefits and perks
6. Respect
7. Responsibility
8. Retirement package
9. Salary
10. Training

He suspects the average boss ranks these in the order 9, 1, 3, 8, 5. In other words, bosses think employees are extrinsically motivated by external factors.

He says most employees would rank these in the order 4, 7, 2, 10 and 6. This suggests intrinsic motivation works best.

Curiously Robert Winston made much the same point on television last night. When children were asked to paint and were not told there was any prize for doing so they carried on painting when their teacher left the room. There motivation was intrinsic so they did an enjoyable activity for its own sake. When they were told there was a prize for the best picture and the teacher left the room they did just enough to hope to win the prize and stopped. In other words, an extrinsic motivation reduced their productivity.

Now I doubt that there is no overlap in the lists as Adrian Furnham suggests. My own experience of running these surveys in companies I have run is that salary tends to come at 4 or 5 on the list. But I have always found that I get something like the result he does. Cash counts for much less than most accountants, managers and economists think. Treating people with respect counts for much more.

The next time you are asked about employment practices, and why staff grumble after pay rises, or never even appear to notice them, suggest it's time for the client to look for other things to offer instead. Of course with some people you might have to be quite subtle in your delivery. But it's a seriously good way to increase the economic return on staff costs. And from my experience I will tell you, it works.

Richard Murphy
AccountingWEB contributing editor Richard Murphy is a sole practitioner chartered accountant but was previously senior partner of a firm for 11 years. He has also been chairman, chief executive or finance director of 10 SMEs. A collection of previous articles by Richard on practice management themes is available in Practice Management Zone


Replies (2)

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By ltreanor
08th Feb 2006 13:26

Money doesn't motivate ?
Sorry, I don't go with this one.

Why do salespeople get paid commission ? Why grant share options to directors ?

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Richard Murphy
By Richard Murphy
09th Feb 2006 13:45

Why indeed?

There are exceptions to any rule.

The output of sales people can be measured in cash. So for them cash rewards do make sense - and the sort of person who is motivated by cash alone is attacted to that sort of job. So, it might work there.

Share options? Let me be candid - a complete waste of time if you ask me - for anyone. It's all a myth put forward by those who argue for "shareholder value" in large companies when that is the last thing they're really worried about. For executives these are tax reduced pay. Ask anyone else and I get the response that they'd rather have cash - indeed I gave up on them in a high tech start up when most of the staff refused them!

But in either cases, exceptions prove the rule, not vice versa. And I suggest you start asking staff if you think I'm wrong - you might be enlightened.


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